Russia’s ONGK and China’s XY Group Industrial Development Co (轩辕集团实业开发有限公司) have agreed to jointly invest $686 million to build an oil transit complex in Russia’s Far East. This will boost Russian oil exports to China as Moscow expands infrastructure and shifts exports eastward, away from politically “unfriendly” Europe.
The financing deal was signed last week at an economic forum in Vladivostok. The complex will be built near a railway bridge crossing the Amur River, connecting Russian and Chinese border towns.
The $686 million complex will include a terminal able to store and load 5.8 million metric tons of crude oil yearly, plus oil and gas condensate blends. It will also have a warehouse for receiving, storing and distributing 1 million metric tons of petroleum products and fuel oil annually. Additionally, it will include facilities for transshipping 650,000 tons of liquefied petroleum gas per year.
China’s crude imports from Russia hit a record high in May, up 15.3% year-on-year. Meanwhile, Europe has cut Russian oil imports by 90% since the Ukraine war began.
Sanctioned by the West, Russia has turned to China as its strongest ally. China refuses to criticize Russia’s invasion of Ukraine and has increased economic cooperation, helping Russia offset losses from Western sanctions. Amid strengthening China-Russia economic ties, senior Chinese official Wang Yi visited Russia September 18-21 for strategic consultations, possibly to prepare for the leaders’ upcoming meeting.
Source: Voice of America, September 18, 2023